H.ardly surprising news,but I'm staggered at the continual stance of Disney DVDs by priced at non competitive levels compared to other distributers.
Offers are generally made during school holidays to buy two for £20,but this is normally on a selected range of poor straight to DVD sequels & really old classics that most people have anyway.
Most retailers in the UK sell DisVids for £19.99,compared to a lot of good quality two disc new releases being available for under £10 .
Full story below
By Kim Christensen and Claudia Eller | Times Staff Writers
Posted September 15, 2005
Walt Disney Co.'s film unit will post a loss of up to $300 million for the current quarter, Chief Financial Officer Thomas Staggs warned Wednesday, describing the studio's performance as "considerably worse than we anticipated."
Staggs said the loss was driven in part by such industrywide problems as a lethargic box office and a cooling off of the once-sizzling DVD market.
"But in fairness, the difficult results at the studio have more to do with the performance of our titles than the marketplace as a whole," Staggs told investors at a Merrill Lynch media investment conference in Pasadena.
Staggs also said Disney could be forced to write off a $100-million investment in aircraft leases because of financial problems of Delta Air Lines Inc., which filed for bankruptcy protection Wednesday. That would "obviously have a meaningful impact" on Disney's results, Staggs said.
Disney was among several big companies that invested in airline leases in the 1990s only to take hits when the industry slumped in the wake of the Sept. 11 terrorist attacks and rising jet fuel prices. In 2003, Disney took an $83-million after-tax write-off of United Airlines leases.
The red ink forecast Wednesday was worse than Wall Street expected. In a research brief, Banc of America Securities analyst Douglas Shapiro called the number "significantly larger" than his estimate of $8 million and consensus estimates of $10 million.
As a result, Shapiro said, Banc of America would slash its earnings per share estimate for the fiscal fourth quarter ending Sept. 30 to 19 cents from 27 cents.
Staggs' comments came after the stock market ended its regular session, during which Disney's stock fell 70 cents to $24.11, its lowest close since October.
Despite predicting a loss for the studio of $250 million to $300 million, Staggs said Disney remained "confident in delivering double-digit growth in earnings for the company overall," based on the strength of its ESPN and ABC networks, as well as its theme parks business.
Staggs' warning about the film studio's performance singled out three features from Disney's Miramax unit — "The Great Raid," "The Brothers Grimm" and "Underclassman" — that were among the final movies overseen by Miramax founders Harvey and Bob Weinstein for Disney. The brothers are formally cutting their ties to the Burbank entertainment giant at the end of this month to form their own company, capping 12 often-contentious years under Disney's umbrella.
As part of their divorce settlement, Disney agreed to rush more than a half-dozen remaining Miramax films into theaters by Sept. 30. Last month, as Disney's studio posted a $34-million loss for its fiscal third quarter, Staggs warned that marketing and distributing so many Miramax films could hurt earnings.
Putting a spotlight on the failure of the Miramax films comes at a particularly sensitive time for the Weinsteins, who are relying on their lengthy track record to raise as much as $1 billion to fund their new movie company.
"This is a short-term cost of transition," the Weinsteins said in a statement. The brothers added that the library of successful films they made for Disney, including "Shakespeare in Love" and "Pulp Fiction," would continue to reap benefits for the company's shareholders.
Two of the films mentioned Wednesday by Staggs, "Great Raid" and "Brothers Grimm," were costly productions with sizable marketing budgets. Both sat on Miramax shelves for years after being filmed — often a red flag as to a movie's commercial prospects.
Staggs also listed as an underachiever Disney's own "Dark Water" from its Touchstone film unit, and added that sales of its direct-to-video movies were weak. Other Disney releases underperforming in the quarter included "Sky High" and the animated release "Valiant," which the studio did not produce but did market and distribute.
Both Miramax and Disney have been struggling at the box office. Although the losses were greater than expected, some analysts said they also reflected the normal ups and downs of the movie business.
"They have had some quarters in the recent past where all the stars were aligned for them," Anthony Valencia of TCW Group said of Disney's fortunes. "Now they have a quarter where none of the stars are aligned. It's the nature of the film business."
Harold Vogel, an independent analyst with Vogel Capital Management, said the Miramax films' poor performance was somewhat predictable, coming as they did at the end of the Weinsteins' run with Disney.
"Going forward, it does not cast a long shadow into the future," Vogel said. "It's finished. It's ancient history."
Offers are generally made during school holidays to buy two for £20,but this is normally on a selected range of poor straight to DVD sequels & really old classics that most people have anyway.
Most retailers in the UK sell DisVids for £19.99,compared to a lot of good quality two disc new releases being available for under £10 .
Full story below
By Kim Christensen and Claudia Eller | Times Staff Writers
Posted September 15, 2005
Walt Disney Co.'s film unit will post a loss of up to $300 million for the current quarter, Chief Financial Officer Thomas Staggs warned Wednesday, describing the studio's performance as "considerably worse than we anticipated."
Staggs said the loss was driven in part by such industrywide problems as a lethargic box office and a cooling off of the once-sizzling DVD market.
"But in fairness, the difficult results at the studio have more to do with the performance of our titles than the marketplace as a whole," Staggs told investors at a Merrill Lynch media investment conference in Pasadena.
Staggs also said Disney could be forced to write off a $100-million investment in aircraft leases because of financial problems of Delta Air Lines Inc., which filed for bankruptcy protection Wednesday. That would "obviously have a meaningful impact" on Disney's results, Staggs said.
Disney was among several big companies that invested in airline leases in the 1990s only to take hits when the industry slumped in the wake of the Sept. 11 terrorist attacks and rising jet fuel prices. In 2003, Disney took an $83-million after-tax write-off of United Airlines leases.
The red ink forecast Wednesday was worse than Wall Street expected. In a research brief, Banc of America Securities analyst Douglas Shapiro called the number "significantly larger" than his estimate of $8 million and consensus estimates of $10 million.
As a result, Shapiro said, Banc of America would slash its earnings per share estimate for the fiscal fourth quarter ending Sept. 30 to 19 cents from 27 cents.
Staggs' comments came after the stock market ended its regular session, during which Disney's stock fell 70 cents to $24.11, its lowest close since October.
Despite predicting a loss for the studio of $250 million to $300 million, Staggs said Disney remained "confident in delivering double-digit growth in earnings for the company overall," based on the strength of its ESPN and ABC networks, as well as its theme parks business.
Staggs' warning about the film studio's performance singled out three features from Disney's Miramax unit — "The Great Raid," "The Brothers Grimm" and "Underclassman" — that were among the final movies overseen by Miramax founders Harvey and Bob Weinstein for Disney. The brothers are formally cutting their ties to the Burbank entertainment giant at the end of this month to form their own company, capping 12 often-contentious years under Disney's umbrella.
As part of their divorce settlement, Disney agreed to rush more than a half-dozen remaining Miramax films into theaters by Sept. 30. Last month, as Disney's studio posted a $34-million loss for its fiscal third quarter, Staggs warned that marketing and distributing so many Miramax films could hurt earnings.
Putting a spotlight on the failure of the Miramax films comes at a particularly sensitive time for the Weinsteins, who are relying on their lengthy track record to raise as much as $1 billion to fund their new movie company.
"This is a short-term cost of transition," the Weinsteins said in a statement. The brothers added that the library of successful films they made for Disney, including "Shakespeare in Love" and "Pulp Fiction," would continue to reap benefits for the company's shareholders.
Two of the films mentioned Wednesday by Staggs, "Great Raid" and "Brothers Grimm," were costly productions with sizable marketing budgets. Both sat on Miramax shelves for years after being filmed — often a red flag as to a movie's commercial prospects.
Staggs also listed as an underachiever Disney's own "Dark Water" from its Touchstone film unit, and added that sales of its direct-to-video movies were weak. Other Disney releases underperforming in the quarter included "Sky High" and the animated release "Valiant," which the studio did not produce but did market and distribute.
Both Miramax and Disney have been struggling at the box office. Although the losses were greater than expected, some analysts said they also reflected the normal ups and downs of the movie business.
"They have had some quarters in the recent past where all the stars were aligned for them," Anthony Valencia of TCW Group said of Disney's fortunes. "Now they have a quarter where none of the stars are aligned. It's the nature of the film business."
Harold Vogel, an independent analyst with Vogel Capital Management, said the Miramax films' poor performance was somewhat predictable, coming as they did at the end of the Weinsteins' run with Disney.
"Going forward, it does not cast a long shadow into the future," Vogel said. "It's finished. It's ancient history."